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Feds arrest couple, seize $3.6B in hacked Bitcoin funds

washingtonpost.com

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Re: Feds arrest couple, seize $3.6B in hacked Bitcoin funds

#41

Post by throwaway22032 »

lupire wrote: post #35
throwaway22032 wrote: post #28

Earlier quoted context omitted.

Most cryptocurrencies are designed such that the concept of "returning" stolen funds is not really meaningful. The best analogue is cash. If you want to return the cash you need to physically find it and move it back.

Sovereign law isn't so easily waved away, unless you are seasteading.

I'm not waving it away, this isn't a discussion about the legal system.

If someone steals steal a fiver from your back pocket then there's no magical wand that the police can wave that teleports the cash back into your hand. They need to come and get it from the kitchen table or wherever the thief has put it assuming they haven't spent it.

Most cryptocurrencies are explicitly designed to act as digital cash in this way. The system is structured such that a coin is fully under the control of the owner of the private key, there is no third party involved to effect some sort of return like a bank can.

If the coins are sitting in an exchange or some other custodian i.e. not exclusively under the control of the owner of a private key then you can effect this change by leaning on the exchange (in a legal sense).

The exchange is the bank, the coins are cash.

Re: Feds arrest couple, seize $3.6B in hacked Bitcoin funds

#42

Post by knorker »

throwaway22032 wrote: post #28
loceng wrote: post #14

I ask this every so often during threads regarding stolen cryptocurrency: Is there any solution yet to preventing stolen cryptocurrency funds from being spent? Isn't the only solution to have a central database and require laws to require every transaction to be pre-checked to see if it's stolen funds or not? And not only that, the centralized system will have to be constantly keeping track of wallet mixing to see wh…

Most cryptocurrencies are designed such that the concept of "returning" stolen funds is not really meaningful. The best analogue is cash. If you want to return the cash you need to physically find it and move it back.

> Most cryptocurrencies are designed such that the concept of "returning" stolen funds is not really meaningful.

Which is why these things are not features, but bugs, in cryptocurrencies. The core design principles of cryptocurrencies are actually bugs, if you think about it.

Re: Feds arrest couple, seize $3.6B in hacked Bitcoin funds

#43

Post by pc86 »

kisamoto wrote: post #11

In a hypothetical, if the two did not breach Bitfinex servers (unauthorized access to others systems) but instead managed to "guess" the private key to the Bitfinex wallet and transfer the funds, would this also be a crime? Would this be treated the same way?

Knowing the key doesn't immediately mean that your access is authorized. This isn't equivalent to finding a $20 bill on the ground so there's not really any corollary to stumbling across it.

Re: Feds arrest couple, seize $3.6B in hacked Bitcoin funds

#44

Post by gruez »

runeks wrote: post #39
openhandcrimp wrote: post #32

It seems that Tornado Cash ( https://tornado.cash/ ) could have been used to launder the funds. I wonder if: - Laundering happened before Tornado Cash existed, so Tornado Cash was not used - They used something like Tornado Cash, but the funds were still traceable

Are you using Tornado Cash to launder money?

Yeah wtf, I'm not sure why he's randomly namedropping it.

Re: Feds arrest couple, seize $3.6B in hacked Bitcoin funds

#45

Post by openhandcrimp »

runeks wrote: post #39
openhandcrimp wrote: post #32

It seems that Tornado Cash ( https://tornado.cash/ ) could have been used to launder the funds. I wonder if: - Laundering happened before Tornado Cash existed, so Tornado Cash was not used - They used something like Tornado Cash, but the funds were still traceable

Are you using Tornado Cash to launder money?

I am personally not, but don't you think that use case is obvious?

Re: Feds arrest couple, seize $3.6B in hacked Bitcoin funds

#46

Post by sschueller »

ngokevin wrote: post #33
kisamoto wrote: post #11

In a hypothetical, if the two did not breach Bitfinex servers (unauthorized access to others systems) but instead managed to "guess" the private key to the Bitfinex wallet and transfer the funds, would this also be a crime? Would this be treated the same way?

From the article, they aren't necessarily being charged with the hack itself

So they where hired to launder the money? Wouldn't the FBI try to make a deal to catch the people who executed the hack?

Re: Feds arrest couple, seize $3.6B in hacked Bitcoin funds

#48

Post by optimalsolver »

loceng wrote: post #14

I ask this every so often during threads regarding stolen cryptocurrency: Is there any solution yet to preventing stolen cryptocurrency funds from being spent? Isn't the only solution to have a central database and require laws to require every transaction to be pre-checked to see if it's stolen funds or not? And not only that, the centralized system will have to be constantly keeping track of wallet mixing to see wh…

As I understand it, the Poly Network hacker found it impossible to transfer his stolen Tether due to those coins being frozen at Tether HQ.

Re: Feds arrest couple, seize $3.6B in hacked Bitcoin funds

#49

Post by knorker »

throwaway22032 wrote: post #41
lupire wrote: post #35

Earlier quoted context omitted.

Sovereign law isn't so easily waved away, unless you are seasteading.

I'm not waving it away, this isn't a discussion about the legal system. If someone steals steal a fiver from your back pocket then there's no magical wand that the police can wave that teleports the cash back into your hand. They need to come and get it from the kitchen table or wherever the thief has put it assuming they haven't spent it. Most cryptocurrencies are explicitly designed to act as digital cash in this w…

Cash is not a good comparison to cryptocurrency at all.

Stealing $70M, or trying to launder $5B in cash, is absolutely not the same thing as doing the same with cryptocurrencies.

$70M or $5B is a serious logistical problem to steal, hide, and launder.

$70M is 700kg in $100s.

> under the control of the owner of the private key,

Not owner, no. Temporary viewer is enough. And that's a huge difference.

Re: Feds arrest couple, seize $3.6B in hacked Bitcoin funds

#50

Post by throwaway110535 »

gruez wrote: post #30
throwaway110535 wrote: post #17

25 years max for stealing billions? God bless America. > Lichtenstein and Morgan are charged with conspiracy to commit money laundering, which carries a maximum sentence of 20 years in prison, and conspiracy to defraud the United States, which carries a maximum sentence of five years in prison. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statut…

>25 years max for stealing billions? 1. The bitcoins were only worth ~$70 million at the time of theft. saying they stole "billions" is highly misleading 2. I don't get it, aren't we supposed to be getting less "tough on crime", especially for non-violent offenses?

1. Just quoting the amount mentioned in the press release. I guess its highly misleading too?

2. Supposed to be, but we all know that folks are sitting in jail right now for longer periods of time for stealing less.

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